Uttar Pradesh Power Distribution Network Rehabilitation Project Is a Sector Project Consisting of About 35 Subprojects

Attachment

Project Description The Uttar Pradesh Power Distribution Network Rehabilitation Project is a sector project consisting of about 35 subprojects. It is proposed to be financed through multitranche financing facility (MFF) with time slice approach. All 35 subprojects will commence under tranche 1 and will continue under tranche 2.

Out of the 35 subprojects, 26 will be financed by ADB and 9 by the Uttar Pradesh Power Corporation Limited (UPPCL). ADB will finance 13 subprojects to deliver output 1 (conversion of rural low-voltage network to aerial bundle conductors), and 13 subprojects for output 2 (separation of 11 kilovolt (kV) rural feeders supplying private tube wells for agriculture and residential consumers). The nine subprojects to be financed by UPPCL will support output 1.

The design and monitoring framework (DMF) for this tranche is in

Annex 1.

Cost Estimates and The total cost of the subprojects to be financed under tranche 1 is Financing Plan estimated at $624.0 million inclusive of taxes, duties, interest, and other charges on the loan during construction. The detailed cost estimates and financing plan are in Annex 2.

Item ADB OCR Counterpart Total Loan Funds Rural electricity distribution 125.6 215.1 340.7 network improved . Systems for separating 166.9 166.9 electricity distribution network supplying agriculture consumers from residential consumers established Project Management 7.4 0.3 7.7 Contingencies 0.0 99.9 99.9 Financial Charges 0.0 8.6 8.6

Total 300.0 324.0 624.0 Source: Asian Development Bank

Loan Amount and The request is for a regular loan of $300 million from the ordinary capital Terms resources of Asian Development Bank (ADB) provided under ADB’s London interbank offered rate (LIBOR)-based lending facility, with a 20 year term including a grace period of 5 years, an interest rate determined in accordance with ADB’s LIBOR-based lending facility and such other terms and conditions as agreed in the framework financing agreement (FFA), and further supplemented under the Loan and Project Agreements. Based on straight line repayment method, the average loan matuarity is 12.75 years and the matuarity based

premium is nil. Expected Project The subprojects financed under tranche 1 are expected to be

Completion and completed by 31 December 2025. Closing date of the loan account will Closing Dates be 30 June 2026.

Advance Contracting Advance contracting is requested for works, goods and services, and consultant recruitment, as per the provision of the framework financing agreement.

Retroactive Financing Retroactive financing is requested for the eligible expenditures, not exceeding 20% of the loan amount, incurred before loan effectiveness, but not earlier than 12 months before the signing of the legal

agreement.

Implementation The executing agency will be the Uttar Pradesh Power Corporation Arrangements Limited (UPPCL). The following four subsidiaries of UPPCL are the implementing agencies. a. Dakshinanchal Vidyut Vitran Nigam Limited, Agra (DVVNL) b. Madhyanchal Vidyut Vitran Nigam Limited, Lucknow (MVVNL) c. Paschimanchal Vidyut Vitran Nigam Limited, Meerut (PVVNL) d. Purvanchal Vidyut Vitran Nigam Limited, Varanasi (PUVVNL)

Detailed implementation arrangements are described in the facility administration manual (FAM).

Procurement and The procurement plan is in Annex 3. Terms of reference (TOR) for the Consulting Services engagement of advisors under this tranche is included in FAM.

Confirmation of India confirms that the understandings set out in the FFA have been Continuing Validity of adhered and remain true to date. and Adherence to Provisions of FFA, Previous Agreements, and the Design and Monitoring Framework

Readiness of the The preliminary designs, economic and financial assessment, bid Project for documents for works contracts and request for proposals (RFP) for Implementation project management consultants to be financed under tranche 1 have been completed. The technical and financial bid evaluation of all 26 works contracts and technical and financial proposal evaluation of all 5 consulting contracts for project management have been completed. The investments to be financed using counterpart funds have been awarded and work is in progress.

Safeguards The safeguard assessment and review framework (SARF) for the MFF project, initial environmental examination, and resettlement plan based on sample activities under subprojects have been prepared and included as Annex 4. 3

Annex 1

DESIGN AND MONITORING FRAMEWORK FOR TRANCHE 1 Impact the Project is Aligned with Quality and financial cost recovery in the power supply in Uttar Pradesh improved (24X7 Power for All) a

Performance Indicators with Data Sources and Results Chain Targets and Baselines Reporting Mechanisms Risks Outcome By 2026: Efficiency, a. UPPCL’s ATC losses reduced a. Uttar Pradesh Fiscal constraints reliability, and to 25% Electricity Regulatory might prevent the sustainability of (2019 baseline: 36.8%) (OPs 6.2, Commission annual Uttar Pradesh power supply in 6.2.1) report government’s b. UPPCL group’s financial losses timely payment of selected rural b. UPPCL’s annual on consolidated basis reduced to subsidy, and areas improved financial statements ₹12 billion (2019 baseline : introduction of Financial losses of ₹70.7 billion on direct cash consolidated basis) (OP 6.1) transfers to subsidize poor households’ lifeline consumption, adversely affecting UPPCL’s financial position. Outputs By 2025: 1. Rural 1a. 40,000 km of low voltage COVID-19–related electricity network in 30,000 rural habitations restrictions on 1a. Project progress distribution inhabited by 40 million people construction reports submitted by network including 10 million people living activities cause UPPCL and ADB review improved below the poverty line converted to implementation missions. ABC (2019 baseline: 0 km of ABC delays. in identified habitations) (OPs 1.3.1, 3.1.3, 3.2, 5.1.1)b

1b. At least 25% of adults in 1b. Sample surveys to be selected districts, of whom 50% undertaken before and are women demonstrated after the intervention improved knowledge on safe and efficient use of electricity. (2019 baseline: 0%)c

2. Systems for By 2025: separating 2a. 400 11 KV feeders supplying 2a-b. Project progress electricity electricity to 100,000 farmers reports submitted by distribution for separated from feeders supplying UPPCL and ADB review agriculture residential consumersd missions consumer from (2019 baseline: 0) residential (OPs 1.3.1, 3.1.3) consumers established 2b. 400 new 11 kV feeders commissioned for exclusive electricity supply to 1.0 million 4

Performance Indicators with Data Sources and Results Chain Targets and Baselines Reporting Mechanisms Risks rural households (6 million people) d (2019 baseline :0) (OPs 2.4.1, 3.1.3, 3.2, 3.2.5, 5.1,

5.1.1)

3. Systems for By December 2022: bill collection in 3a. At least 1,000 individuals Conservative rural areas and (including at least 500 women 3a. Pre- and post-training social attitudes financial reported improved knowledge on evaluation and traditions management new bill collection methods discourage female c improved, and (2019 baseline: 0) participation as gender-sensitive collection agents workplace 3b. At least 1,000 individuals created (including 500 women) from 500 3b-3e. TA progress village entities employed as billing reports prepared by the and collection agents (2019 TA consultants and TA c baseline: 0) (OPs 1.2, 2.1) completion report to be completed in 2023. 3c. 4 new bill collection strategies with mechanisms for engaging village entities developed and pilot tested in at least 1,000 rural habitations. (2019 baseline: 0)c

3d. FMAP consisting of 8 actions including provisioning policy for unrecoverable receivables implemented (2019 baseline: not available) (OP 6.2.3) c

3e. 2 sets of gender-responsive human resource practices developed for UPPCL and its contractors. (2019 baseline: none) ( OP 2.3.2)c

Key Activities with Milestones 1. Rural electricity distribution network improved 1.1 Undertake detailed survey and quantity estimates by Contractor (Q1 2021–Q3 2021) 1.2 Conversion of low voltage network to ABCs (Q2 2021–Q2 2025) 1.3 Implement of awareness building on safe and efficient electricity usage (Q1 2021–Q4 2021).

2. Systems for separating distribution network supplying agriculture from residential consumers established 2.1 Undertake detailed survey and quantity estimates by contractor (Q1 2021–Q4 2021) 2.2 Construction 11 kV feeders to supply residential villages (Q2 2021–Q4 2025) 2.3 Verify and accept the 11 kV feeders (Q3 2022–Q4 2028)

3. Systems for bill collection in rural areas and financial management improved, and gender- sensitive workplace created 3.2 Design new bill collection strategies involving rural women (Q1 2021–Q1 2021) 3.3 Pilot test four new bill collection strategies using WSHGs (Q2 2021–Q2 2022) 3.3 Prepare and implement receivables write-off policy (Q1 2021–Q4 2022) 5

3.4 Develop interventions for gender inclusivity of contractual workers (Q1 2021–Q3 2021) 3.5 Conduct an institutional assessment of human resources policies and practices on gender inclusivity (Q1 2021–Q2 2021) 3.6 Design and implement gender-responsive employment practices. (Q1 2021–Q4 2022) Project Management Activities Procurement plan activities (Q1 2019–Q3 2020) Consultant selection procedure (Q2 2019–Q3 2020) Gender action plan key actions (Q1 2021–Q4 2022) Semiannual review missions (Q4 2020–Q2 2025) Approval of periodic financing request for tranche 2 (Q4 2023)

Inputs ADB (regular ordinary capital resources loan) $300 million ADB Trust Fund (technical assistance) $ 2 million UPPCL and Government of Uttar Pradesh $324 million Assumptions for Partner Financing Not applicable ABC = aerial bundle conductor, ADB = Asian Development Bank, ATC = aggregate technical and commercial, FMAP = financial management action plan, km = kilometer, kV = kilovolt, OP = operational priority, Q = quarter, TA = technical assistance, UPPCL = Uttar Pradesh Power Corporation Limited, WSHG = women’s self-help group. a Government of India and Government of Uttar Pradesh. 2017. 24X7 Power for All. India. b ABC systems have design features to withstand climate and disaster risks. c To be financed by attached TA. d Newly constructed 11 kV feeders have design features to be climate and disaster resilient.

Contribution to Strategy 2030 Operational Priorities Expected values and methodological details for all OP indicators to which this operation will contribute results are detailed in Contribution to Strategy 2030 Operational Priorities (accessible from the list of linked documents in Appendix 2).

Source: Asian Development Bank.

Annex 2: Detailed Cost Estimate and Financing Plan of Tranche 1

ADB OCR loan UPPCL Total cost Amount (Taxes) % of Cost Amount (Taxes) % of Cost Amount Category Category A. Investment costs Output 1: Improving distribution network in rural 1. habitations a. MVVNL 74.4 (11.4) 100% 0.0 0.0 0% 74.4 b. PuVVNL 51.2 (7.8) 100% 0.0 0.0 0% 51.2 c. DVVNL 0.0 0.0 0% 66.6 (10.2) 100% 66.6 d. PVVNL 0.0 0.0 0% 148.5 (22.4) 100% 148.5 Output 2: Separation of distribution network supplying agriculture and residential 2. consumers a. DVVNL 72.0 (11.0) 100% 0.0 0.0 0% 72.0 b. PVVNL 94.9 (14.5) 100% 0.0 0.0 0% 94.9 Subtotal (A) 292.6 (44.6) 58% 215.1 (32.6) 42% 507.7 B. Other costs 1. Project management 7.4 (1.1) 100% 0.0 0.0 0% 7.4 2. Quality testing cost 0.0 0.0 0% 0.3 (0.0) 100% 0.3 Subtotal (B) 7.4 (1.1) 96% 0.3 (0.0) 4% 7.7 Total Base Cost (A+B) 300.0 (45.8) 58% 215.5 (32.6) 42% 515.4 C. Contingencies 1. Physical 0.0 0.0 0% 77.2 0.0 100% 77.2 2. Price 0.0 0.0 0% 22.7 0.0 100% 22.7 Subtotal (C) 0.0 0.0 0% 99.9 0.0 100% 99.9 D. Financing Charges During Implementation 1. Interest during implementation 0.0 0.0 0% 7.8 0.0 100% 7.8 2. Commitment charges 0.0 0.0 0% 0.8 0.0 100% 0.8 Subtotal (D) 0.0 0.0 0% 8.6 0.0 100% 8.6 Total Project Cost (A+B+C+D) 300.0 (45.8) 48.07% 324.0 (32.6) 52% 624.0 Note: Numbers may not sum precisely because of rounding. Source: Executing Agency and Asian Development Bank estimates

A. Procurement Plan

Basic Data Project Name: Uttar Pradesh Power Distribution Rehabilitation Project Project Number: 51395-002 Approval Number: TBD Executing Agency: Uttar Pradesh Power Country: India Corporation Ltd., Lucknow, India Implementing Agency: 1. Purvanchal Vidyut Vitran Nigam Limited, Varanasi, India. 2. Madhyanchal Vidyut Vitran Nigam Limited, Procurement Risk: High Lucknow, India. 3. Dakshinanchal Vidyut Vitran Nigam Limited, Agra, India. 4. Paschimanchal Vidyut Vitran Nigam Limited, Meerut, India. Project Financing Amount: $800 million ADB Financing: $430 million Project Closing Date: 31 December 2028 Cofinancing (ADB Administered): None Non-ADB Financing: $370 million Date of First Procurement Plan: 12 February 2019 Date of this Procurement Plan: 20 June 2020

Procurement Plan Duration: 18 months Advance contracting: Yes eGP: Yes

A. Methods, Review and Procurement Plan Except as the Asian Development Bank (ADB) may otherwise agree, the following methods shall apply to procurement of goods, works, non-consulting services, and consulting services.

Procurement of Goods, Works, and Nonconsulting Services Method Comments Open Competitive Bidding $1,000,000 and above

Consulting Services Method Comments QCBS $100,000 and above

B. List of Active Procurement Packages (Contracts) The following table lists goods, works, non-consulting and consulting services contracts for which the procurement activity is either ongoing or expected to commence within the procurement plan’s duration.

Goods, Works, and Nonconsulting Services Bidding Package Estimated Procurement 2 Advertisement 5 1 General Description Review Procedure 4 Comments Number Value ($) Method 3 Date Purvanchal Vidyut Vitran Nigam Ltd P01 Replacement of 11.6 OCB Prior 1S2E Q1/2019 Pre- existing bare qualification conductor LT lines of bidders: N with AB cable in Domestic Varanasi zone preference: N Bidding Document: SBD for Plant, current edition Comments: Prior Review P02 Replacement of 6.5 OCB prior 1S2E Q1/2019 Pre- existing bare qualification conductor LT Lines of bidders: N with AB Cable in Domestic Mirzapur Zone preference: N Bidding Document: SBD for Plant, current edition Comments: Prior Review P03 Replacement of 18.4 OCB prior 1S2E Q1/2019 Pre- existing bare qualification conductor LT Lines of Bidders: N with AB cable in Domestic Prayagraj Zone preference: N Bidding Document: SBD for Plant, current edition Comments: Prior Review P04 Replacement of 11.8 OCB prior 1S2E Q1/2019 Pre- existing bare qualification conductor LT Lines of Bidders: N with AB cable in Domestic Gorakhpur Zone preference: N 9

Bidding Document: SBD for Plant, current edition Comments: Prior Review P05 Replacement of 5.4 OCB prior 1S2E Q1/2019 Pre- existing bare qualification conductor LT lines of Bidders: N with AB cable in Basti Domestic Zone preference: N Bidding Document: SBD for Plant, current edition Comments: Prior Review P06 Replacement of 8.5 OCB prior 1S2E Q1/2019 Pre- existing bare qualification conductor LT lines of Bidders: N with AB Cable in Domestic Azamgarh Zone preference: N Bidding Document: SBD for Plant, current edition Comments: Prior Review Madhyanchal Vidyut Vitran Nigam Ltd. P07 Replacement of 17.6 OCB prior 1S2E Q2/2019 Pre- existing bare qualification conductor LT Lines of Bidders: N with AB Cable in Domestic Ayodhya Zone preference: N Bidding Document: SBD for Plant, current edition Comments: Prior Review P08 Replacement of 14.9 OCB prior 1S2E Q2/2019 Pre- existing bare qualification conductor LT lines of Bidders: N with AB cable in Domestic Devipatan Zone preference: N

Bidding Document: SBD for 10

Plant, current edition Comments: Prior Review P09 Replacement of 10.5 OCB prior 1S2E Q2/2019 Pre- existing bare qualification conductor LT Lines of Bidders: N with AB Cable in Domestic Shahjahanpur & preference: N Badaun Districts in Bidding Bareilly Zone Document: SBD for Plant, current edition Comments: Prior Review P10 Replacement of 12.8 OCB prior 1S2E Q2/2019 Pre- existing bare qualification conductor LT Lines of Bidders: N with AB Cable in Domestic Pilibhit & Bareilly preference: N Districts in Bareilly Bidding Zone Document: SBD for Plant, current edition Comments: Prior Review P11 Replacement of 14.1 OCB prior 1S2E Q2/2019 Pre- existing bare qualification conductor LT Lines of Bidders: N with AB Cable in Domestic Lakhimpur Kheri & preference: N Sitapur Districts in Bidding Lucknow Zone Document: SBD for Plant, current edition Comments: Prior Review P12 Replacement of 15.6 OCB prior 1S2E Q2/2019 Pre- existing bare qualification conductor LT Lines of Bidders: N with AB Cable in Rai Domestic Bareilly, Unnao & preference: N Hardoi Districts in Bidding Lucknow Zone Document: SBD for Plant, current edition Comments: Prior Review P13 Replacement of 4.8 OCB prior 1S2E Q2/2019 Pre- 11

existing bare qualification conductor LT Lines of Bidders: N with AB Cable in Domestic Lucknow CIS Zone preference: N Bidding Document: SBD for Plant, current edition Comments: Prior Review

Dakshinanchal Vidyut Vitran Nigam Ltd. P14 Construction of new 13.4 OCB prior 1S2E Q2/2019 Pre- 11 KV Feeders for qualification separation of of Bidders: N agriculture Domestic consumers and preference: N associated works in Bidding Mainpuri, Mathura & Document: Firozabad Districts in SBD for Agra Zone Plant, current edition Comments: Prior Review P15 Construction of new 19.4 OCB prior 1S2E Q2/2019 Pre- 11 KV Feeders for qualification separation of of Bidders: N agriculture Domestic consumers and preference: N associated works in Bidding Agra District in Agra Document: Zone SBD for Plant, current edition Comments: Prior Review P16 Construction of new 10.8 OCB prior 1S2E Q2/2019 Pre- 11 KV Feeders for qualification separation of of Bidders: N agriculture Domestic consumers and preference: N associated works in Bidding Aligarh Zone Document: SBD for Plant, current edition Comments: Prior Review P17 Construction of new 8.8 OCB prior 1S2E Q2/2019 Pre- 11 KV Feeders for qualification separation of of Bidders: N 12

agriculture Domestic consumers and preference: N associated works in Bidding Jhansi Zone Document: SBD for Plant, current edition Comments: Prior Review P18 Construction of new 9.1 OCB prior 1S2E Q2/2019 Pre- 11 KV Feeders for qualification separation of of Bidders: N agriculture Domestic consumers and preference: N associated works in Bidding Banda Zone Document: SBD for Plant, current edition Comments: Prior Review P19 Construction of new 11.4 OCB prior 1S2E Q2/2019 Pre- 11 KV Feeders for qualification separation of of Bidders: N agriculture Domestic consumers and preference: N associated works in Bidding Kanpur Dehat, Document: Etawah, Auraiya & SBD for Farrukhabad Districts Plant, current in Kanpur Zone edition Comments: Prior Review P20 Construction of new 14.9 OCB prior 1S2E Q2/2019 Pre- 11 KV Feeders for qualification separation of of Bidders: N agriculture Domestic consumers and preference: N associated works in Bidding Kanpur Nagar& Document: Kannauj Districts in SBD for Kanpur Zone Plant, current edition Comments: Prior Review Paschimanchal Vidyut Vitran Nigam Ltd. P21 Construction of new 11.8 OCB prior 1S2E Q2/2019 Pre- 11 KV Feeders for qualification separation of of Bidders: N agriculture Domestic consumers and preference: N associated works in Bidding Meerut & Baghpat 13

Districts in Meerut Document: Zone SBD for Plant, current edition

Comments: Prior Review P22 Construction of new 4.9 OCB prior 1S2E Q2/2019 Pre- 11 KV Feeders for qualification separation of of Bidders: N agriculture Domestic consumers and preference: N associated works in Bidding Ghaziabad Zone Document: SBD for Plant, current edition Comments: Prior Review P23 Construction of new 32.1 OCB prior 1S2E Q2/2019 Pre- 11 KV Feeders for qualification separation of of Bidders: N agriculture Domestic consumers and preference: N associated works in Bidding Bulandshahr & Hapur Document: District in SBD for Bulandshahr Zone Plant, current edition Comments: Prior Review P24 Construction of new 5.1 OCB prior 1S2E Q2/2019 Pre- 11 KV Feeders for qualification separation of of Bidders: N agriculture Domestic consumers and preference: N associated works in Bidding NOIDA Zone Document: SBD for Plant, current edition Comments: Prior Review P25 Construction of new 27.5 OCB prior 1S2E Q2/2019 Pre- 11 KV Feeders for qualification separation of of Bidders: N agriculture Domestic consumers and preference: N associated works in Bidding Saharanpur, Document: Muzzafarnagar & SBD for Shamli Districts in Plant, current Saharanpur Zone 14

edition Comments: Prior Review P26 Construction of new 36.4 OCB prior 1S2E Q2/2019 Pre- 11 KV Feeders for qualification separation of of Bidders: N agriculture Domestic consumers and preference: N associated works in Bidding Moradabad Zone Document: SBD for Plant, current edition Comments: Prior Review

Consulting Services Package Estimated Value Selection Type of Advertisement General Description Review6 Comments8 Number ($) Method Proposal7 Date C01 Project Monitoring Unit 1.2 QCBS prior Q2/2019 FTP Assignment: for UPPCL International Quality-Cost Ratio: 80:20 C02 Project Management 1.9 QCBS prior Q2/2019 STP Assignment: Agency for International Madhyanchal Vidyut Quality-Cost Vitran Nigam Ltd Ratio: 80:20

C03 Project Management 1.6 QCBS prior Q2/2019 STP Assignment: Agency for Purvanchal International Vidyut Vitran Nigam Ltd Quality-Cost Ratio: 80:20 C04 Project Management 2.1 QCBS prior Q2/2019 STP Assignment: Agency for International Dakshinanchal Vidyut Quality-Cost Vitran Nigam Ltd Ratio: 80:20 C05 Project Management 2.5 QCBS prior Q2/2019 STP Assignment: Agency for International Paschimanchal Vidyut Quality-Cost Vitran Nigam Ltd Ratio: 80:20

C. List of Indicative Packages (Contracts) Required under the Project The following table lists goods, works, nonconsulting, and consulting services contracts for which the procurement activity is expected to commence beyond the procurement plan duration and over the life of the project (i.e. those expected beyond the current procurement plan’s duration).

None.

D. List of Awarded and Completed Contracts The following table lists the awarded contracts and completed contracts for goods, works, nonconsulting, and consulting services.

None. 15

E. Non-ADB Financing The following table lists goods, works, non-consulting, and consulting services contracts over the life of the project, financed by non-ADB sources.

Goods, Works, and Non-consulting Services Estimated Package Contract Procurement General Description number of Comments12 Number Value9 Method contracts Paschimanchal Vidyut Vitran Nigam Ltd. P27 AB Cabling of districts of Meerut, Hapur, GB National Nagar, Bulandshahr, 45.9 1 EA Financing Procedures Baghpat and Ghaziabad P28 AB Cabling of districts National of Saharanpur, 35.6 1 EA Financing Procedures Muzaffarnagar, Shamli P29 AB cabling of districts National 30.3 1 EA Financing of Bijnor and Rampur Procedures P30 AB Cabling of districts National of Moradabad, 35.3 1 EA Financing Procedures Sambhal and Amroha Dakshinanchal Vidyut Vitran Nigam Ltd. P31 AB Cabling of districts of Aligarh, Hathras, National Firozabad Mainpuri, 19.2 16.3 EA Financing Procedures Kanpur Nagar and Auraiya P32 AB Cabling of districts of Etah, Kasganj, National 10.7 1 EA Financing Farrukhabad, Kannauj Procedures and Etawah P33 AB Cabling of districts National 19.9 1 EA Financing of Agra and Mathura Procedures P34 AB Cabling of districts National 4.9 1 EA Financing of Jhansi and Lalitpur Procedures P35 AB Cabling of districts of Jalaun, Banda, 1 National 12.7 EA Financing Chitrakoot, Hamirpur Procedures and Mahoba